Deloitte & Touche, Ernst & Young, KPMG and PriceWaterhouseCoopers. They scour the books of 98 percent of American companies with revenue over $1 billion, according to the Government Accountability Office. On the Department of Justice’s preferred gauge of competitiveness, the Hirschman-Herfindahl Index, the industry qualifies as super consolidated.

With scattered data, protected by legal secret classifications, figures are hard to come by. After two years of work, a recent report describes the US intelligence network that is

so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist. Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.

An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances. Every day across the United States, 854,000 civil servants, military personnel and private contractors with top-secret security clearances are scanned into offices protected by electromagnetic locks, retinal cameras and fortified walls that eavesdropping equipment cannot penetrate.

The U.S. intelligence budget is vast, publicly announced last year as $75 billion, 21/2 times the size it was on Sept. 10, 2001. But the figure doesn’t include many military activities or domestic counterterrorism programs. With the quick infusion of money, military and intelligence agencies multiplied. Twenty-four organizations were created by the end of 2001, including the Office of Homeland Security and the Foreign Terrorist Asset Tracking Task Force. In 2002, 37 more were created to track weapons of mass destruction, collect threat tips and coordinate the new focus on counterterrorism. That was followed the next year by 36 new organizations; and 26 after that; and 31 more; and 32 more; and 20 or more each in 2007, 2008 and 2009.

At the recommendation of the bipartisan 9/11 Commission, the George W. Bush administration and Congress decided to create an agency in 2004 with overarching responsibilities called the Office of the Director of National Intelligence (ODNI) to bring the colossal effort under control. 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks. Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year.

Only a handful of senior officials – called Super Users – have the ability to even know about all the department’s activities. But as two of the Super Users indicated in interviews, there is simply no way they can keep up with the nation’s most sensitive work.

International Threat

In more than 50 countries in any month – actually, a figure of 120 countries is being waved around.

Never in Soviet history were there more than 4 secret service agencies in the USSR. Today the US has 17 agencies form what the US calls Intelligence Community. A large rainbow of agencies – CIA FBI, NSA, DEA, DOE, Bureau of ATF, DIA, NRO, NIMA, CTC. NPC. INR. DOE Intel., Army Intelligence et al litter the global scene. Some US Govt. cables, from Wikileaks, quoted US Defence Secretary, Robert Gates on Russia as an “oligarchy run by the security services”.

Going by above data, it would be easier, to describe the USA, using those words.

Over the last 25 years, Governments have spent huge amounts of money to intrude and monitorits population. Millions of CCTV cameras monitor people all over the world. Facial recognition software can ‘see-through’ modifications like spectacles, beards, wigs, changes in hairstyle, etc.

In Britain alone, as per count of few years ago, 60 million subjects are tracked by 1.5 million closed-circuit television cameras. In the USA, there are an estimated 30,000 people, who are listening to phone conversations.

Control Over Media

Global media is dominated by a few news agencies like Reuters, Bloomberg, API, and AFP. These agencies in turn are fed by various think tanks and research organizations, which then dominate global debate. In the last few years, top 10 websites control 75% of the web traffic. Hollywood dominates the big screen. Organizations like Google monitor every click on your computer– which is available to any determined bureaucrat. If not easily, with some difficulty.In today’s age, censorship is usually not the answer. More noise is equally effective.

View from Germany

The German magazine, Der Spiegel, in a recent posts analyzed the US situation.

Nearly two-thirds of net private assets are concentrated in the hands of 5 percent of Americans. In comparison, the upper 5 percent of Germany hold less than half of net assets. In 2009 alone, at the same time as the US was being convulsed by mass layoffs, the number of millionaires in the country skyrocketed.

Indeed, if you look at the reports it compiles on every country in the world, even the CIA has concluded that wealth disparity is greater in the US than in Tunisia or Egypt.

A New ‘Gilded Age’

In a book published in 2010, American political scientists Jacob Hacker and Paul Pierson discuss how this “hyperconcentration of economic gains at the top” also existed in the United States in the early 20th century, when industrial magnates — such as John D. Rockefeller, Andrew Carnegie and J. P. Morgan — dominated the upper stratum of society and held the country firmly in their grip for years.

Writer Mark Twain coined the phrase “the Gilded Age” to describe that period of rapid growth, a time when the dazzling exterior of American life actually concealed mass unemployment, poverty and a society ripped in two.

If the difference in US and German terminology is standardized, Germany is no better than USA.

Now …

Combine this power with the less than 5,000 politicians who control the Government; the 50,000 businessmen who control the 2500 biggest corporations, the 25,000 academics who control national thought streams – and then the enormity of the model becomes numbing.

European banks are emerging from the credit crisis bigger than before, posing more risk to their national economies. BNP Paribas, Barclays and Banco Santander are among at least 353 European lenders that have increased in size since the beginning of 2007. Fifteen European banks now have assets larger than their home economies, compared with 10 lenders three years ago. (via European banks growing bigger, sowing seeds for the next crisis).

Concentration of power

What this has done is increase the concentration of power, risk, capital, manipulation into the hands of a few people. With Europe, USA and Japan dominating the Fortune 500 listing, with Super-mega corporations, the outlook for dilution of power and risk seems bleak and remote.

The other risk is again the full-employment economic model. Mega corporations, which can be easily controlled at arm’s length by the State, dominate the economic sphere. Power is concentrated in the hands of less than 0.1% of the population. Less than 300,000 people control the US economy of more than 30 crore people (300 million).

Jobs for everyone

So, what happens to the 99.9% people who do not control the economy?

They are given jobs. They become employees, associates, apprentices, trainees, understudies, etc – who will fulfill the purpose of these 300,000 people-in-power. From the media and academia, public and private sector, NGOs and Government, bureaucrats and business managers.

Sleight of hand

And while our attention diverted by war, crisis, threats, the real game is being played somewhere else – out of sight and out of bounds.

Self employment, independence, small business are driven out of business by channeling increasing amounts of debt to organizations controlled by the O.1% of the powerful people.

This growth in banks beyond the size or the home economies signifies greater concentration of wealth – and not less. The world would do well to remember that East India Company was after all a company, a private company!

How Big Business and Big Government combine against the aam aadmi, the common man.

Organized crime

analysing a set of figures: the number of billionaires per trillion dollars of GDP for the major countries of the world. Heading the list is Russia with 87 billionaires for its $1.3 trillion of GDP. Coming second is India which has 55 billionaires for the $1.1 trillion of GDP that it generates. Why should this be worrying at all? After all, we did have a booming economy in the last few years. But some perspective would help to see this in the global context. Brazil, which is often cited as an example of very high income inequality, has only 18 billionaires despite a greater GDP than India, while Germany, boasting three times India’s GDP and a per capita income that is 40 times India’s, has just about the same number of billionaires.

For Rajan, who headed a committee on financial sector reforms in India, the numbers are alarming: “Too many people have gotten too rich based on their proximity to the government. If Russia is an oligarchy, how long can we resist calling India one?” It is his contention that reforms have created new sources of rents for the establishment, specially from the allocation of scarce national resources. This means that barring a few exceptions most of India’s billionaires have been created through sweet deals in land, mining, coal, oil and gas. (via Latha Jishnu: It’s a stink and a powerful one).

With concentration in power comes lack of responsiveness! | Image Source & courtesy – Times Of India, cartoon by Ajit Ninan on 27 Dec 2009 | Click for image.

Concentration Of Power

How does one measure concentration of power.

Today the most popular method is the Fortune /Forbes /Businessweek /FT 500 listing of Top corporates. These listings demonstrate that half the world’s economic output is controlled by about 25,000 individuals. Add another 25,000 politicians and bureaucrats. We have about 50,000 people managing the lives of 5 billion people.

What is happening in India

Out of the 30 current Sensex stocks, which make up the Indian Benchmark Index, 15 started off as SME (small and medium enterprises) 25-50 years ago. These organizations today are lobbying (successfully) to ensure that other SMEs do not challenge and compete with these large corporations. Indian policy makers, apparently, cannot learn from successes.

Democracy is a tool that finally lays blame for the crimes of the polity at the feet of the victim | Ajit Ninan cartoon | 2009 Apr 28 The Times Of India Bangalore | Click for image.

And what you think is a right move …

On the other hand, limited liability companies have created a huge debt mountains. What about expanding liability, instead of limited liability. While LLCs can have limited outward liability, they can create unlimited inward liabilities – in the way of debt, bonds, debentures, notes, paper, et al.

These two elements, limited liability and a separate legal entity, have made these Frankensteins different from any previous association of businessmen. The legal structure of corporations allow actual owners to hide behind a legal façade, without liability. These corporations have access to large amounts of fiat currency. Old debts are repaid by taking new debts. Competition is killed by raising entry barriers – which is again done by accessing huge amounts of debt. Some of this borrowings are irredeemable – and called equity.

Limited liability of the shareholders has meant that various stakeholders usually have little or no recourse – when things don’t pan out. Some stakeholders (usually shareholders and management) have access only to an upside, other stake holders, actually, finally take the risk. Such companies resist any attempt at accountability.

It is this ability to evade ethical practices and issues that differentiates these corporations from other business enterprises. From the massacre of millions of Indians during the 1857 War (by the East India Company), the many regime changes that corporations have pushed, the record of these organizations has been far from average.

A collusive polity, allied with State-funded media and academia, combine against the common man, the aam aadmi. | Cartoon by Ajit Ninan; source – Times of India; on 10 Apr 2009 | Click for image.

You surely know this …

A favorite scam in the Indian mobile phone industry is to activate services that the customer has NOT asked for – and start charging him for it. It then becomes the customer’s responsibility to discontinue these services. If the customer does not pay the bill, his name gets reported to CIBIL, a credit bureau – which will make it difficult for the customer to access other credit services in future.

If he pays the bill , the telecom has succeeded in the scam. The effort required to discontinue these services, in many cases, is seemingly higher than the charge for these services – about Rs.20-30. (40-50 cents per month). The scam becomes outrageous when you multiply this amount with the number of subscribers – at last count nearly 40 crores (400 million).

Stop this swill

The Mobile Recharge Scam

The same scam makes an appearance in mobile recharges. In most circles, especially Mumbai, customers have no way of knowing how and where their money has gone. Hiding behind walls of call centres and IVR machines, telecom companies in India are working hard at keeping customers in the dark.

In the mobile recharge system, an additional victim is the retailer. 2%-4% of pre-paid recharges never reach the consumer. The retailer refunds the money to the customer. In many cases, the reimbursement from the telecom company never reaches the retailer. What is the retailer commission for these recharge services. 2.5%-4%. What are the number of recharges which don’t reach the customer – 2%-4%.

It so turns out that the retailer ends up subsidizing the mobile phone companies by providing these services to the telecom customer. A similar story is playing out in credit card businesses, banking and unsecured loans.

A word of advice

They are working hard to lose the trust that the average Indian has for Indian corporates. Stop all these wasteful CSR swill and propaganda – and just get your members to work their businesses cleanly. That itself will be a big enough CSR for Indian industry.

I doubt if India and Indians need or expect more from businesses – BIG or small.

The largest employer in India is the SME sector

And the BJP does not talk about the SME at all. Just like the Congress is not bothered about them at all. Save the big industry. There is space for big industry and India needs big industry too. The big moneybags call the shots, in both the Congress and the BJP. So, any belief that any one is any different is all wrong. They are more or less of the same agenda.

Shallow thinking

Both have the same limitation in the thinking – set by the external agenda and vocabulary. The difference is language. Congress swears by India (a Latin name of Bharat) and BJP swears by Hindustan and Hindutva (a Levantine name for Bharat). Both miss out on the Bharati nature of people.

No talk of Third currency

Neither (the Congress or the BJP) has the imagination or the strategic depth to think out of the Western box. They are all trying out the same tired Western cliches of IMF and World Bank reform – which is going nowhere. It is the IMF and World Bank which keep the Third World poor and backward.

Those who support the change on the ground that the amendment merely puts in the statute what is already a requirement of arrest and part of police practice ignore the fact that the amendment alters the emphasis significantly, and mandatorily provides that the accused “shall not be arrested in respect of the offence referred to in the notice unless, for reasons to be recorded, the police is of the opinion that he ought to be arrested”. The sad truth is that India has a surplus of legislations but a poor record in enforcement.

By contrast, due to a combination of emotional reactions coupled with some jingoistic formulations, the lawyers have clearly got it wrong in their criticism of the LLP Act. The Act seeks to provide for the creation and regulation of LLPs essentially as hybrid entities which retain the partnership model but are closer to corporations in design and function. (via Right and wrong-The Times of India, By Abhishek Manu Singhvi, Minister in GOI).

Abhishek Manu Singhvi is a Minister in the the current UPA run Government. He is a legal eagle – and the sophisticated face and spokesman for the Congress Party.

Wrong is right, Mr.Sanghvi …

When you are worried about abuse of power by the police, your concerns are quite misplaced Mr.Sanghvi.The Indian Police is doing a good job – and they can do without your cynicism. So you are quite wrong when you are worried about the police abuse of power – with this amendment in law.

All the 5 indices (below) of crime management create a bias for a lawless Indian society and rampant crime. With these four indices, namely: -

High gun ownership

Low police-to-population ration

Low prison population

Highest number of poor people in the world

Capital punishment as a deterrent

against a stable social system, how does India manage low-to-average crime rates.

With less than 25 people per 100,000 in prison, India has the world’s lowest imprisonment rate. Cynics may snigger at India’s ‘inefficient’ police or the slow court procedures as the cause for this low prison population.

That can only mean criminals are at large and India must, therefore have the highest crime rate – which is not true. India has low or average crime rates – based on category. How can India have such a low prison population, with a poor police-to-population ratio and a crime rate which is not above the average – in spite of a large civilian gun population.

And what you think is a right move …

On the other hand, limited liability companies have created a huge debt mountains. What about expanding liability, instead of limited liability. While LLCs can have limited outward liability, they can create unlimited inward liabilities – in the way of debt, bonds, debentures, notes, paper, et al.

These two elements, limited liability and a separate legal entity, have made these Frankensteins different from any previous association of businessmen. The legal structure of corporations allow actual owners to hide behind a legal facade, without liability.These corporations have access to large amounts of fiat currency. Old debts are repaid by taking new debts. Competition is killed by raising entry barriers – which is again done by accessing huge amounts of debt. Some of this borrowings are irredeemable – and called equity.

Limited liability of the shareholders has meant that various stakeholders usually have little or no recourse – when things don’t pan out. Some stakeholders (usually shareholders and management) have access only to an upside, other stake holders, actually, finally take the risk. Such companies resist any attempt at accountability.

It is this ability to evade ethical practices and issues that differentiates these corporations from other business enterprises. From the massacre of millions of Indians during the 1857 War (by the East India Company), the many regime changes that corporations have pushed, the record of these organizations has been far from average.

Concentration Of Power

Newer methods to measure this concentration are devised. Today the most popular methods are the Fortune 500 listing and the Forbes listing. These listings finally demonstrate that half the world’s economic output is controlled by about 25,000 individuals. Add another 25,000 politicians and bureaucrats. We have about 50,000 people managing the lives of 5 billion people. Read this with the faceless entity aspect, it becomes more worrisome.

What Is Happening In India

Out of the 30 current Sensex stocks, which make up the Indian Benchmark Index, 15 started off as SME (small and medium enterprises) 20-30 years ago. These organizations today are lobbying (successfully) to ensure that other SMEs do not challenge and compete with these large corporations. Indian policy makers, apparently, cannot learn from successes.

Abhishek Manu Singhvi is so mixed up …

Just like his Government and party is …

The LLCs and LLPs are legal monsters that are the creations of the West to concentrate power and exploit their power.

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